Welcome to this Q2 2026 pre-silent call by Hiab, hosted by CFO Mikko Puolakka. After a brief recap, we will have time for Q&A, you can use the raise your hand function in the meeting, we will also be taking questions from the telephone lines. With that, over to you, Mikko.
Thank you, Oscar, good afternoon also from my side. As said by Oscar, a quick recap on Q1 performance, a few words about the Q2 releases, what we have done, then Q&A. Firstly, if we look our order intake, our order intake grew 7% on reported basis. If we look the organic order intake and in constant currencies, the order intake grew by 7% in Q1 year-on-year. ING Cranes contributed to the order intake growth by 4% units. On the other hand, the weaker currencies had a 4% negative impact in Q1 order intake. With this 4% units, it means that the ING's order intake was EUR 15 million in the quarter, this is well in line with the acquisition business plan.
We did not book any bigger orders during Q1, not in EMEA and not in Americas. Let's have a look on the order performance per region as the next one. Our order intake grew in EMEA slightly, this is in line with our expectations about gradually improving market situation. In Americas, ING was the biggest contributor to order intake, as mentioned, at roughly EUR 15 million in Q1. As mentioned, no bigger orders both in EMEA and in Americas during Q1. When we look the operating environment development, like in past few quarters, we have seen gradual improvement in our EMEA markets, primarily Europe, as that's the biggest portion of our EMEA order intake. The U.S. demand, we do not expect to further decline anymore, i.e. to remain stable compared to the second half of last year.
We can read also from the news flows, basically every day there is something new in the global economics or geopolitics, be that the Middle East crisis, oil prices, European Central Bank interest developments. All these are, of course, factors which at least do not make the CapEx planning any easier for our customers. A couple of words about our sales development. Firstly, we started Q1 with EUR 114 million lower order book compared to previous year, therefore our sales declined by 7% in Q1. A bit like in order intake, also on organic basis in sales and looking with the constant currencies, sales declined by 6% units. Currencies had a 4% negative impact in our Q1 sales, while ING acquisition in the beginning of January had a positive impact of 3% units in the Q1 sales growth.
The share of services increased in quarter one. Partially, this is due to the lower equipment sales, but also partially, especially due to the increase in our recurring services like spare parts and maintenance. Next, have a look on the regional sales development. If we look geographically, our share of sales was impacted by the positive order intake development in the second half of 2025 in East Europe, while in Americas, the sales was negatively impacted by the decline in the U.S. This U.S. decline was partially offset by the ING acquisition in the beginning of the quarter. In addition to the increase in Europe sales, our Asia Pacific region was slightly up by improving to EUR 26 million, so 7% year-over-year. Our Eco portfolio has developed favorably.
Sales increased there by 23%, Eco portfolio sales representing now 46% of our sales in quarter one. When thinking the quarter one, the key takeaways, also a bit like discussed already earlier, I would say gradual recovery in lifting equipment in EMEA. The delivery equipment market in the U.S., for example, truck-mounted forklifts and tail lifts, we do not anymore expect to further decline. Our cost savings program is developing according to the plan, heading towards the EUR 20 million lower cost level in 2026 when comparing to the full year 2025. Mostly, these savings will be visible in the second half of 2026. Of course, we continue to execute our strategy and focus on growth opportunities.
Here I will come a bit later back on the recently announced Labrie acquisition, which is, of course, very much enabled by our strong cash flow and also the balance sheet where we had a more than EUR 200 million net cash balance at the end of quarter one. A couple of notes about the quarter two releases. We announced the Labrie acquisition in the beginning of June, to be exact, on 1st of June. Labrie making, during the last 12 months, $491 million revenues, strong EBITDA margin with 23% and also additive or accretive operating profit margin of 17%. Very strong order book giving good visibility for the coming quarters and basically 100% of sales coming from North America, mostly through the dealer network. Labrie is represented by four different brands, Labrie, Wittke, Leach and Labrie Plus. Labrie Plus being the services and spare parts.
Service business represents approximately 10% of Labrie's total revenues. Diversified customer base, all these Labrie's applications are actually very usable for both commercial and residential waste handling, residential being the largest part of that business. When we look the deal specifics, purchase price, $1.035 billion on cash-free, debt-free basis. That represents approximately 9.2x EBITDA multiple against Hiab's multiple of slightly over 13x. Like mentioned already earlier, very much supporting the overall margin development for the total Hiab after the acquisition. We expect synergies, especially in sales and procurement, in the kind of low double-digit million amount. Some of these synergies will not be available immediately. As we progress with the integration, we will finance the deal by raising approximately EUR 900 million of interest-bearing debt with the maturities of two to five years, mostly towards the five years maturities.
If we would have completed this acquisition at the end of Q1, when our gearing was around -20%, then our gearing would have been approximately 70% and then the pro forma net debt to EBITDA would have been on the level of 2.1x . We, however, believe that due to the positive cash conversion or strong cash conversion of Hiab as well as Labrie, we can get back to the 50% or below that kind of levels in due course, in one to two years' time. We anticipate to close the deal during Q3. This transaction is subject to regulatory approvals and customary closing conditions. For example, from the regulatory approval point of view, we are not in this kind of business, so it's more, in our view, a formality.
Other releases during one, we have announced only one sizable deal during Q2, and this is related to the home improvement segment in the U.S.A., EUR 37 million in deal size, including both equipment and a service portion of a service contract. This is for the truck-mounted forklifts. Other releases during the quarter, you can find on our website. Last but not least, as the year has progressed, we also specified our outlook for the full year and basically increased the floor level from the previous 13% comparable operating profit to 13.5%. As we have one quarter behind us, have a bit better visibility for the full year, but having still some part of the year kind of open as we have still production slots to be completed, especially for Q3 and Q4.
With those words, I would open the floor for Q&A.
Yes, we have the hand raised by Antti Kansanen already, the other ones, feel free to raise your hand and I will pick you up as we go. Please go ahead, Antti.
Thank you. Can you hear me all right?
Yes.
I had a couple of questions. First on the Labrie and then on the organic development as well. If we start from the Labrie, I just wanted to make sure that going forward when you report it and you will stick to the same adjusted EBIT reporting. I'm referring to the outsized PPAs that you will foresee for the, I think you, Mikko, mentioned first couple of years after closing EUR 30 million-EUR 40 million as you are amortizing the backlog. Is this everything that we should take these into account when we look at the adjusted EBIT contribution? None of these will be any kind of one-offs, or you will start to look at adjusted EBITA or something like that?
Yes. Basically, this PPA would be part of the adjusted EBIT number or adjusted comparable operating profit, which has been the main KPI what we have been presenting. Of course, there will be some integration-related costs, which we would book most probably to the items affecting comparability. Not also included in the adjusted EBIT number. We have been publishing already earlier the EBITA number, and we continue also in the future to show that number. We might add a comparable EBITA number in order to have that kind of PPA without the PPA and without the one-off items.
You're guiding for the adjusted EBIT, and that's kind of a financial target for you. I guess no change in those at this point or anything.
At the moment, no.
Basically, just if I look at the pro forma earnings of Labrie, I will just add the $22 million of their goodwill amortizations then take $35 million off, and that's kind of the net contribution as a pro forma basis?
There is a small adjustment coming from the IFRS conversion, that's a small 0.6% impact mainly coming from how the operating leases are treated in US GAAP versus the IFRS.
I'm sure that you've had a few discussions with investors during the quarter on the sustainability of that profitability on Labrie. You bought it from private equity, there's a notable kind of a margin tick up on the last reporting 12-month period that you highlight. I just wanted to make sure that how should we think about it. Is it sustainable? Is there something kind of extraordinary that has benefited them in terms of having extra backlog rolled out or having a sort of very favorable market conditions or anything like that?
Basically, the profitability improvement has been coming from the top-line increase. We, at least based on our assessment, there is nothing kind of abnormal underlying in the market that Labrie has as shown in the previous slides, quite sizable order book. That of course, supports also the profitability going forward. Then they have done good work in improving the overall operations in their factories in Canada, U.S. as well as in Mexico.
Okay. I just had a few brief ones on the kind of organic outlook. First is on the inflation, freight rates, logistics, all of that. Is there something that you would like to point out near term that is kind of inflating your costs that you are not able to cover with price increases on a very near term, a quarter basis or so?
There is certain component cost increase which is coming from these high oil prices and the overall kind of higher inflation at the moment. These are typically events or developments where we are then well-prepared with our pricing organization and then might adjust somewhat our prices to mitigate some of these inflationary elements. On the other side there, we are also continuously looking sourcing savings. Not always also putting the bill just one to one to our customers, but also looking at how can we save some components. It's a combination of some minor price adjustments and then sourcing savings. We anticipate that, I would say sales margin impact would be kind of slightly net positive from all these activities, pricings as well as the sourcing savings.
Okay. The last one from me is on the same theme of changing geopolitics and inflation worries and all of that. Is the somewhat fragile kind of a demand recovery that you've seen in Europe, how do you think about this? Has there been any kind of a pause in any of your more cyclical client segments, some people kind of considering maybe delaying some of their truck purchasing decisions or anything like that?
At least, broadly, we have not seen that kind of development. Like I mentioned already earlier, all these moving parts in the global economy, at least are not making the decision-making any easier for our customers. We have not seen, at least in wide fronts, that customers would have been somehow taking a pause in their investments.
Okay. Very clear. Thank you very much.
Thank you. We have Mikael Doepel next in line.
Thank you. Thank you very much. Thanks for hosting the call. A couple of questions here. Firstly, if you could talk a bit about the U.S. market environment overall. From an organic point of view, how do you view the situation there now? We can all see the ACT orders still surging, basically, or recovering quite strongly in the last, let's call it, five, six months or so. You are saying that you don't expect the markets to decline anymore, so you're seeing a stabilization. How would you frame your pipeline? How do you see it compared to what we see on some of the truck ordering in that market? We can start there.
Yeah. Overall, as we speak now in Q2, I would still say that very similar kind of behavior and ordering activity we see at the moment what we saw in Q1. As mentioned, there was this EUR 37 million deal in the home improvement segment. Otherwise, very similar kind of behavior in Q2 what we have seen in Q1. Indicating that at least from our side, still the markets seem to be on a stable level. I can't say at least that they are increasing, but also not going downwards.
Would you expect to see an increase, given what we see on the truck ordering side going into the second half of the year?
It is possible, like we have also mentioned that there is quite a long lead time can be from a customer's decision before we see, for example, an order for a Labrie because often the truck lead times are, and the body builders lead times are longer than our own lead times.
Yes. Okay. No, that's fair. Then just another question relating to demand. You talked about the EMEA and Europe in particular, where you see gradual improving market conditions. I also think in conjunction with the Q1 report, you said that you're starting to see opportunities emerging in the pipeline. Yes. Related to Germany's stimulus package. Just wondering, there's a lot of stimulus planned for Europe, right? I guess, just wondering what you're seeing in the European market now. Do you see that these projects are starting to have some effect on your demand, or is it still a very fragile overall recovery?
I would say that the recovery is still quite fragmented. Like I said also earlier that, for example, in Germany, the quoting activity has improved. Some of the customers are kind of courage enough to make investment decisions. We can't say necessarily that it's all across the board in different industries. It's very difficult for us to say that some investment decisions which customers make in Germany, are they now just because of the stimulus package or are there other elements? Because many of our products are very versatile in their application. Yes, some might be used for data center construction or infrastructure construction, but similarly, those could be done in a private house renovation-related projects.
Right. Okay. No, that's clear. Just finally from my side on the basically staying on the same topic here on demand overall. Just thinking about your aftermarket or your service business. How would you describe the situation there going into the second quarter if you look at your connected units and overall activity, how you see it in the market, and also your own kind of strategy there to improve your capture rates and so on?
I would say that we have seen solid development in the recurring services, like also in the previous quarters, spare parts and maintenance contracts, supported by the increasing number of connected fleet. Every quarter, we are adding new long-term maintenance contracts to our portfolio. Like we saw in quarter one, currencies had a quite sizable impact on services performance. If I remember correctly, our services sales declined by 1%. On a constant currency basis, in quarter one, services grew by 5%. This growth was coming solely from recurring services while the installation services declined. Very similar kind of development we have also, or pattern we have seen in quarter two.
Okay. No, that's very clear. Thank you very much.
Thank you, Mikael. There's no more raised hands at this moment. Do we have any questions from the telephone lines? It seems that we do not. I would thank you for attending, and thank you for your questions. We will publish our Q2 results on 22nd of July and speak to you then. Thank you.
Thank you.